Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) The object of this Subdivision is to give effect to the purposes of Subdivision 165 - CC (about change of ownership or control of a company that has an unrealised net loss) in these cases:
(a) on formation of a * consolidated group, a * CGT asset held directly by the * head company is affected by that Subdivision, and the * business continuity test is failed;
(b) on an entity becoming a * subsidiary member of a consolidated group, an asset consisting of:
(i) a * membership interest that a * member of the group (including a chosen transitional entity under Division 701 of the Income Tax (Transitional Provisions) Act 1997 ) holds in the entity; or
(ii) a liability that the entity owes to such a member;
is affected by that Subdivision, and the business continuity test is failed;
(c) on a company becoming a subsidiary member:
(i) a CGT asset of the company that becomes an asset of the head company is affected by that Subdivision; and
(ii) because the company is a chosen transitional entity, the asset does not have its tax cost reset; and
(iii) the business continuity test is failed;
(d) on an entity ceasing to be a subsidiary member, a CGT asset of the head company that becomes an asset of the entity is affected by that Subdivision, and the business continuity test is failed.
Note: Subdivision 165 - CC also affects an entity that has deferred losses under Subdivision 170 - D on assets that it formerly owned. Subdivision 715 - D gives effect to the purposes of Subdivision 165 - CC if such an entity becomes a member of a consolidated group.
(2) This Subdivision achieves its object by supplementing and modifying the application of Subdivision 165 - CC to take account of how the rest of this Part treats * members of a * consolidated group (in particular the provisions about entities becoming or ceasing to be members).